BASE Textiles owners flee, Tk328cr loan recovery uncertain

BASE Textiles Limited has defaulted on Tk328 crore in loans to three banks, and with the owners fleeing, loan recovery prospects have become uncertain.  

According to creditors, the Chattogram-based ready-made garment exporter has defaulted on Tk222 crore from One Bank, Tk68 crore from City Bank, and Tk38 crore from Social Islami Bank.  

AM Saleh Uddin Kutubi, executive vice president and Agrabad branch manager of Social Islami Bank, told The Business Standard, "We have sought approval from our head office to initiate legal action against the company's owners. BASE Textiles secured the loan from Social Islami Bank in 2015."  

Speaking to TBS, Zahed Iqbal, manager of One Bank's Agrabad branch in the port city, said BASE Textiles began operations and secured loans from the branch in 2004.  

"While the first generation ran a successful business, the factory's exports ceased entirely in 2022-23. Four cheque bounce cases have been filed against the company's owners for loan defaults, and the court has issued arrest warrants for the defendants," he added.  

Established in 1996, BASE Textiles was once a leading exporter. According to the National Board of Revenue, it exported RMG worth $14 million in fiscal 2004-05. The factory's last recorded shipment was to Turkey in February 2023.  

The factory's founding chairman was Shahadat Hossain, and its founding managing director was SM Nurul Huda Chowdhury Jahangir, both entrepreneurs from Chattogram. After their deaths about a decade ago, ownership passed to the second generation, triggering disputes. 

Following the Covid-19 pandemic, exports declined, worker unrest grew, and financial troubles deepened. Eventually, the factory shut down, and some of its owners either fled abroad or went into hiding.

Meanwhile, the company has filed a case, alleging the theft of equipment worth Tk100 crore from the factory. However, police, creditor bank officials, and other stakeholders claim the factory authorities staged the theft to evade loan repayments.  

Officials suspect the owners themselves are stealing valuable equipment to avoid repaying bank loans. Creditor bank representatives said the removal of key assets – including machinery, gas generators, and air conditioners – has jeopardised loan recovery efforts.  

Meanwhile, Hasan Shibli, managing director of the company, and his wife, Director Israt Jahan, are in the UAE, while Director SM Jamal Uddin is in New Zealand. The banks, however, have no information on the whereabouts of Chairman Sidratul Muntaha.  

Contacted over phone regarding the allegations, Hasan Shibli told TBS, "I... appreciate your effort for fact findings. I think you need to dig down a little bit more to get closer to the true picture. I cannot blame you for this outcome since the market rumours are not in favour of the truth."

According to creditor banks, loans were secured by Tk274.57 crore in collateral, including stock, accounts receivable, plant, machinery, and other fixed and floating assets (Pari-Passu). Additionally, land and factory assets worth Tk312.79 crore were mortgaged, with 298 acres of land valued at Tk47.53 crore.  

A City Bank official, speaking on condition of anonymity, told TBS that apart from the mortgaged land, all other assets have been stolen. The land's estimated value is at most Tk50 crore, putting the recovery of the loans at significant risk.  

Theft case  

On 6 November, a case was filed with Chandgaon police station over the alleged theft of assets from BASE Textile in the Chandgaon industrial area.  

The lawsuit, filed by a factory official, states that the RMG unit of BASE Textiles shut down in June 2022 due to heavy financial losses caused by the Covid-19 pandemic and the Russia-Ukraine war.  

The textile unit later ceased operations in June 2023 due to worker unrest and financial irregularities. As a result, the factory's closure made it difficult to properly supervise the contractual security guards.  

Between May and November 5 last year, valuable assets – including foreign machinery, gas generators, and air conditioners – were stolen from the factory, allegedly without the guards noticing. The estimated loss is Tk100 crore.  

However, the complaint does not name any specific accused individuals or even list anonymous suspects.  

Earlier, on 30 September, a general diary (GD) was filed with Chandgaon Police Station on behalf of Base Textile. In the GD, factory manager Faiz Ahmed stated that after the change of government after 5 August, petty thefts began increasing, taking advantage of the instability.  

He also noted a rise in the presence of miscreants near the factory, who had assaulted security guard Zahirul Islam. However, no theft charges were filed at the time.  

Mir Manjir Ahsan, the plaintiff in the case and former Manager of Sales and Marketing at Base Textile, told TBS that the thefts continued despite filing the case. Initially occurring at night, the thefts have now been happening both day and night for the past one and a half months, leaving nothing but the factory walls.  

He added that due to financial constraints, the company could not implement adequate security measures. Despite repeatedly informing the creditor bank and the police, they have received no cooperation. He also stated that the company will handle the bank's debts and lawsuits through legal means.  

Cite visit  

A mystery has emerged surrounding the theft of machinery.  

During a visit on Saturday, the main entrance of BASE Textile was found locked. Inside, iron structures lay scattered, with broken glass, bricks, and debris strewn across the premises.  

Small and medium-sized machinery had been dismantled, the paved floor had been removed, and large machinery, including generators, had been cut with gas cutters.  

The administrative building next to the factory was stripped of air-conditioning units, televisions, and other electrical equipment – even the window grilles had been removed.  

Md Harun, a security guard inside the gate, said 10-15 people are constantly stealing factory assets, sometimes in groups and sometimes individually. He admitted they were powerless to stop the thefts, as the intruders often took them hostage.